Before the Open (Dec 5)

Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets closed mostly down. China fell more than 1%; Japan, Australia and New Zealand were also weak. Singapore did moderately well. Europe is currently up across-the-board. Germany, Belgium, the Netherlands, Poland, Finland and Russia are up more than 1%; France, Austria, Norway, Sweden, Switzerland and Greece are also doing well. Italy is weak. Futures in the States point towards a moderate gap up open for the cash market.
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LB Weekly – the indexes, the breadth indicators, a look at the big picture
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As is typically the case on a Monday morning, I don’t have anything to add to the comments made in LB Weekly, published Sunday morning. In it I stated I like the market overall and expected to see new highs after the current dip concluded, but in the near term I was much less confident because there are several warnings.
The AD line and AD volume line couldn’t climb very high.
The bullish percent charts have formed divergences.
The percentage of stocks above their 200- and 50-day MAs haven’t come close to matching their previous highs – another sign the rally didn’t have broad-based participation.
A further rest is needed to shake out the weak longs and let shorts re-establish positions.
But with news out of Italy (the Prime Minister is stepping down), stocks are getting a premature boost. We’ll see if it lasts. I’m still of the opinion a little more weakness is needed. More after the open.
Stock headlines from barchart.com…
Air Products & Chemicals (APD +0.33%) was upgraded to ‘Buy’ from ‘Neutral’ at Citigroup.
Citrix (CTXS +0.18%) was upgraded to ‘Buy’ from ‘Neutral’ at Mizuho Securities USA with a price target of $100.
Marvell Technology Group Ltd (MRVL +0.29%) was downgraded to ‘Sell’ from ‘Neutral’ at Goldman Sachs.
Hilton (HLT +0.20%) was upgraded to ‘Buy’ from ‘Sell’ at MKM Partners with a 12-month target price of $28.
McDonald’s (MCD -0.19%) was upgraded to ‘Buy’ from ‘Neutral’ at Nomura with a12-month target price of $139.
Nike (NKE -0.38%) was upgraded to ‘Buy’ from ‘Hold’ at HSBC with a price target of $60.
Quantenna Communications (QTNA -1.06%) was upgraded to ‘Strong Buy’ from ‘Buy’ at Needham & Co with a 12-month target price of $25.
Globus Medical (GMED +0.55%) rose nearly 3% in after-hours trading after it was named to replace Talen Energy in the S&P MidCap 400 effective after the close of trading Tuesday, December 6.
HomeStreet (HMST -0.68%) climbed over 3% in after-hours trading after it was named to replace UMB Financial in the S&P SmallCap 400 effective after the close of trading Tuesday, December 6.
B&G Foods (BGS +0.47%) gained over 1% in after-hours trading after it acquired Victoria Fine Foods for $70 million in cash.
Zendesk (ZEN +1.63%) slid over 5% in after-hours trading after the company said two of its SVPs were leaving the company, Marcus Bragg effective December 7, and Amanda Kleha effective December 30.
Today’s Economic Calendar
8:30 Gallup US Consumer Spending Measure
8:30 Fed’s Dudley: Macroeconomic Outlook
9:11 Fed’s Evans speech
9:45 PMI Services Index
10:00 Labor market condition index
10:00 ISM Non-Manufacturing Index
12:30 PM TD Ameritrade IMX
2:05 PM Fed’s Bullard: U.S. Monetary and Economic Policy
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers